Functional tissue regeneration remains an elusive goal for the treatment of a variety of traumatic injuries and chronic degenerative diseases that afflict a significant portion of the general population. Although mammals successfully regenerate tissues during early stages of fetal development, this trait is irreversibly lost as mammals mature. The contrast between embryonic and adult wound healing mechanisms suggests that the microenvironment that facilitates proper tissue regeneration in embryos is distinctly different from that of adult somatic tissues. Therefore, obtaining and introducing the molecular constituents of embryonic microenvironments to sites of adult tissue injury or disease may alter the course of endogenous tissue repair, yielding functional neo-tissues. A number of stem cell therapies are being developed in an attempt to restore the cellularity of damaged tissues, and in most instances, despite low levels of engraftment and differentiation into mature cell types, transplanted stem cells evoke significant functional improvements in the regenerative potential of tissues, indicating that the factors produced by stem cells may in fact directly impact tissue morphogenesis. This concept suggests a potential paradigm shift in the development and application of regenerative stem cell therapies - from cell replacement substitutes to biocatalytic agents of tissue regeneration. Thus, the objective of this proposal is to develop engineered biomaterials capable of sequestering morphogenic factors produced by differentiating embryonic stem cells (ESCs) and to deliver ESC-derived morphogens to adult wound sites in order to enhance tissue regeneration. These studies will provide new insights into the regenerative function of pluripotent stem cells and mechanisms of mammalian tissue repair, as well as directly lead to the development of a new class of regenerative molecular therapeutics to treat a variety of traumatic injuries and degenerative diseases.